Management as a Liberal Art Research Institute

Drucker’s Way of Turning Failure into Success

William A. Cohen Ph.D.

PUBLISHED:

March 19, 2024

Rowland Hussey Macy graduated from business school. On four separate occasions, he opened a retail store, only to see each one fail. His fifth attempt succeeded, although the first day brought in a miniscule $11.08 in sales. Macy died a wealthy man, and 150 years later, Macy’s store still exists. Even though suffering periodic setbacks, Rowland Macy’s successors recently received a $5.8 billion buyout offer. 


Macy is a prime example of turning failure into success. Politicians also serve as examples of how following the right principles from Peter Drucker can allow one to advance from a dismal failure to outstanding success. Ronald Reagan was defeated twice as Republican nominee for U.S. president. He’d been a Democrat previously. He finally succeeded in becoming President of the United States on his third attempt. Another prominent U.S. president failed at just about everything. He failed in business and faced bankruptcy, and was defeated in bids for the Illinois State Legislature, Speaker of the House, an appointment for the U.S. Land Office, the U.S. Senate, and Vice President. Despite these setbacks, he became the 16th President of the United States in 1860 and took the country to war against the Confederate States. The 16th President was elected during major controversy and eventually saved the Union. To the best of my knowledge, no historian ever called Abraham Lincoln a failure.


Getting the Right Person for the Right Job

What is the key to turning failure into success? For Drucker, the most important step was getting the right person for the job. This step is frequently neglected by managers who are hiring others, as well as many emerging leaders. If you are the consultant or the responsible manager, you may well have inherited a subordinate. The process to obtain one may have started and been completed before you were in a position to make the decision. However, even if it is too late to do anything about finding the best person for the job, you may get in early enough to adjust, or at least correct the situation. 


If you are the individual looking at a possible new opportunity, just remember that Drucker said that staffing should be from the perspective of the right person for the right job. This means that matching the needs of the position with the individual’s strengths. Film actors frequently turn down potential roles in new movies because they know that the opportunity may not be right for them, or they have the wrong director or wrong co-star. Managers are artists of a different type. Still, a manager’s professional artistry in his or her work is of no less importance to the outcome of the endeavor. Drucker recommended following three important guidelines for the hiring manager:


1.      Think through the requirements of the job 

2.      Choose three or four candidates for the job rather than deciding 

immediately on one candidate

3.      Don’t make your final selection without discussing the choice with knowledgeable colleagues. This goes for all concerned directly with the appointment. 


The Requirements of the Job

A poorly designed job, one in which the requirements have not been thought through may be an impossible job, a job that no one can perform successfully. An impossible job means that work intended to be accomplished can only be accomplished poorly or cannot be done at all. Being impossible or nearly so risks the destruction, or at best, the misallocation of scarce and valuable human resources, including your own. To design a job properly, the objectives and requirements of the job must be analyzed to decide on those few requirements that are crucial to the job’s performance. That way the individual trying to fill the position can staff for strength, focusing the few critical areas of the job that are essential or more important. 


If you are the candidate, you should do an analysis yourself to ensure that to the best of your ability, you believe you can perform the job well and better than anyone else under the conditions intended. If you can’t, inquire as to whether the conditions you feel might hurt your ability to perform the job well can be changed.


Choose Multiple Candidates for a Job before Selection

Some managers promote or make selections for hiring after considering only one or two candidates. They are in a hurry or they are overly impressed with a single candidate for a position. At the very least, think through and select several candidates. The correct way according to Drucker is to consider three or four candidates, all of whom meet the minimum qualifications for the position and make the right decision. Have these selections right from the start. 


Sometimes the reason that this wisdom is ignored is that the hiring executive makes assumptions about a candidates’ suitability before considering all candidates qualifications against the prime job requirements. Establishing the most important requirements is a necessity and immensely helpful.


Managers having the opportunity to accept such a job frequently make a similar mistake. They are frequently blinded by the new job being a perceived promotion, paying better, or having a more impressive title. But all these factors are secondary to the ability to perform in the job and fully enjoy themselves during the challenge of their performance. As the manager looks at a prospective new job, being distracted by a few impressive, but less relevant factors is another reason to consider alternatives before accepting any position.


Discuss Your Choice with Colleagues 

Drucker was not saying that hiring and making job appointments is a group decision. It is not, and as the hiring executive you are responsible for the outcome regardless of others’ opinions with whom you should consult. You are still responsible. However, it makes sense to share your plans and get others’ opinions and ideas whenever it is possible to do so. Even if you decide to promote someone who others don’t recommend, at least you’ll know the pitfalls of your appointment and you’ll learn more about what others think and know regarding the various candidates you are considering.

 

Is this a Work in Progress?

It would be nice if every manager could hit the ground running in every new job. However, this isn’t always possible, especially in a new job that is new not only to the placed executive, but also to the organization. Whether new or old,  it may present a unique challenge to any a manger. A supervising manager can ease the way by clearly laying out requirements, meeting frequently during the early weeks with the individual in a new position, helping or assisting without doing the new appointee’s job for him or her, but above all, not letting the new appointee fail. So don’t be too hasty in immediately replacing a new assignment. Some need time to develop, and sometimes the assignment itself may have been made without knowledge of a particular factor or whether adequate resources such as money, personnel, equipment, or facilities have been allocated. Moreover, this can change given the way the new assignee operates or plans to operate. You may never be able to anticipate this precisely because there are many different ways of approaching any task; changes may need to be made depending on who holds the position now and who might in the future. 


Remembering that as the boss, you are there to help. Never forget the injunction: “Don’t you let him fail.” Again, if you are the job candidate, you need to look at yourself. You can stretch and learn and should expect those changes in any type of promotion. But if the job isn’t one you think you can learn or grow into, look at alternatives and discuss this with the individual who hired you.


Drucker’s People Approach

The idea that managers rise to their level of incompetence is a dangerous myth. If a manager isn’t performing, of course he needs to be relieved of his or her duties. But to automatically fire a manager due to failure with no further thought is, Drucker maintained, human sacrifice. There may be an equally challenging job available at which he or she can be highly successful, even if unsuited to this particular job. 


Implement Drucker’s suggestions and you will have an excellent “batting average” of promoting the right person into the right job and of success. If you take these actions your organization is on the way to being populated with the best and most qualified managers. And if you are the candidate for a promotion or a sideways move and one of these managers, you will help yourself to success as you turn past failures into success. You will contribute to the success of any activity the organization has undertaken and “save the Union” as Lincoln did.

The Future of Knowledge Work: What Drucker can teach us

By Karen Linkletter Ph.D. • November 19, 2024
Interview with Karen Linkletter at the 16th Global Peter Drucker Forum 2024  Video Interview

The Specifics of Management of the Knowledge Worker

By Ryan Lee • November 7, 2024
Nowhere is management theory demanded more than in managing the knowledge worker, and yet nowhere is management theory more inadequate in addressing a field’s issues than in knowledge work. This is the point Peter Drucker posited in his work Management Challenges for the 21st Century (1991), and to resolve it he came up with six factors that determine the productivity of the management worker. Among these, his final point that management workers “must be treated as an ‘asset’ rather than a ‘cost’” by any given organization is an important concept1. While it only gradually emerged within management theory over the century, it is crucial for any employer and any government to understand and apply if they are to retain a competitive advantage going into the future. Historically, management theory has been about improving the output of the worker through banal efficiency: how to increase the production of steel per head, how to increase the production of cars per hour, how to minimize deficient products, etc. In all these considerations, the worker is a disposable resource. When he is hired, he is set to a particular task that is typically repetitive and thus easily taught, and when he is not needed because of shortcomings in his work, company difficulties, or automation, he is laid off. Referred to as “dumb oxen”, workers were seen in management theory as machines to have productivity squeezed out of. The shift from a majority manufacturing to service-based economy during the first half of the twentieth century changed this dynamic to some extent. The American postwar economic boom introduced the office worker as a common source of employment. This trend continued throughout the conglomerate era of the 1960s and was helped by the decline of the American manufacturing industry in the 1970s. Now in a stage dominated by service and knowledge work, the American economy must approach management differently. The aforementioned cost-asset shift is a demonstration of why this is so, as Drucker’s emphasis on the knowledge worker’s autonomy means that they wield control, not only within their job but over who they should work for as well. This in addition to the high-capital nature of knowledge workers means that the old management theory approach to labor as disposable will backfire catastrophically for any company that tries it with their knowledge workers. It is also important to remember the demographic trends of the United States, and more so the world, in considering why the cost-asset shift is vital. For all of human history until some fifty years ago, population was considered to be in tandem with economic power, given larger populations yielded larger labor forces and consumer markets. Economic growth was thus also correlated with population growth, demonstrated by the historic development of Europe and the United States and the more recent examples of the developing world. Consequently, the worldwide decline in fertility rates, and the decline in population numbers in some developed countries, signals economic decline for the future. In the labor market, smaller populations mean fewer jobs that produce for and service fewer people. Although the knowledge worker has grown in proportion to the total labor market, these demographic declines will affect knowledge workers as well, meaning employers will have a vested interest in retaining their high-capital labor. To enforce this, the cost-asset shift will have to come into play. The wants and needs of the knowledge worker pose a unique challenge in the field of management. Autonomy, for the first time, can be regarded as a significant factor affecting all other aspects of this labor base. What good does a large salary provide a knowledge worker if they don’t feel that they are welcome at an institution? How would they perceive that their work is not being directed towards productive pursuits at their corporation, especially given the brain work and dedication given to it? Of course, the fruits of one’s labor has been a contentious issue in management ever since compensation and workers’ rights became a universal constant with the Industrial Revolution, but this is augmented by the knowledge worker’s particular method of generating value. Given that Drucker poses their largest asset and source of value as their own mind, they will intrinsically have a special attachment to their work almost as their brainchild. Incentivizing the knowledge worker is also only one part of this picture. Per Drucker, the knowledge worker’s labor does not follow the linear relationship between quantity invested and returned. The elaborate nature of knowledge work makes it heavily dependent upon synergy: the right combination of talent can grow an organization by leaps and bounds, while virtually incompatible teams or partnerships can render all potential talent useless. And the human capital cost of the knowledge worker, both in their parents and the state educating them and in cost to their employers, is astronomical compared to all previous kinds of labor. In conclusion, the needs and wants of the knowledge worker must be met adequately, especially in the field of management. Management must almost undergo a revolution to adapt to this novel challenge, for the knowledge worker is the future of economic productivity in the developed world. Those employers that successfully accommodate the demands of this class of talent will eventually reign over those that do not accept that this is the direction economic productivity is headed.  References Drucker, P. F. (1991) Management Challenges for the 21st Century. Harper Business.

The Wisdom and Continuing Relevance of Peter Drucker

By Michael Cortrite Ph.D. • November 7, 2024
What is wisdom? The dictionary says it is knowledge of what is true and right coupled with just judgment as to action. Jennifer Rowley reports that it is the “ability to act critically or practically in a given situation. It is based on ethical judgment related to an individual's belief system.” (Rowley 2006 p. 255). So, wisdom seems to be about deciding on or doing an action based on moral or ethical belief in helping other people. This clearly describes Peter Drucker and his often prescient ideas For the 100 th anniversary of Peter Drucker’s birth, Harvard Business Review dedicated its November 2009 magazine to Drucker. In one of the articles about Drucker by Rosabeth Moss Kanter (2009 p. 1), What Would Peter Say? Kanter posits that, Heeding Peter Drucker's wisdom might have helped us avoid—and will help us solve numerous challenges, from restoring trust in business to tackling climate change. He issued early warnings about excessive executive pay, the auto industry’s failure to adapt and innovate, competitive threats from emerging markets, and the perils of neglecting nonprofit organizations and other agents of societal reform. Meynhardt (2010) calls Drucker a towering figure in Twentieth Century management. He says no other writer has had such an impact. He is well-known to practitioners and scholars for his practical wisdom and common sense approach to management as a liberal art. Drucker believed that there is no how-to solution for management practice and education. Doing more of “this” and less of “that” and vice versa is not how Drucker suggests managers do their work. Rather, Drucker relies more on morality and the virtue of practical wisdom to solve problems related to organizations. The virtue that Drucker talks about cannot be taught. It must be experienced and self-developed over time. A good example of this is Drucker’s Management by Objectives (MBO). Drucker does not give technical advice on how to initiate MBO. Rather he wisdomizes his moral convictions that integrating personal needs for autonomy with the quest of submitting one’s efforts to a higher principle (helping people) ensures performance by converting objective needs into personal goals. (Meynhardt, 2010). Peter Drucker published thirty-eight articles in the Harvard Business Review (HBR) and seven times won the McKinsey Award presented annually to the author of the best article published during the previous year in HBR. No other person has won as many McKinsey awards as Drucker The former editor-in-chief of Harvard Business Review, Thomas A. Stewart, quotes Peter Drucker; “The few of us who talked of management forty years ago were considered more or less deranged.” Stewart says that this was essentially correct. Harvard Business Review's very mission is to improve management practice. Stewart says this mission is inconceivable without Drucker’s work. Drucker’s work in management planted ideas that are as fruitful today as they ever were. Stewart posits that each year, managers discover extraordinary and immediate relevance in articles and books that were written before they were born or even before their parents were born. Stewart (2016) tries to answer the questions: Why does Drucker’s work endure? and Why is Drucker still relevant? First, was Drucker’s talent for asking the right questions. He had an instinct for being able to not let the urgent drive out the important, for seeing the trees, not just the forest. This allowed him to calmly ask pertinent questions that encouraged clients to find the proper course to take. Secondly, Drucker was able to see whole organizations. Instead of focusing on small particular problems. Ducker had the ability to find the overarching problem as well. Stewart uses Drucker’s 1994 HBR article, The Theory of the Business to make this point. Many people were trying to analyze the problems of IBM and General Motors by looking for root causes and trying to fix the blame. Drucker, on the other hand, argued correctly that the theories and assumptions on which they had managed successfully for many years were outdated. This article is as relevant today as it was in 1994 because Drucker took the “big picture view.” And no one else has ever been so skillful at describing it. Thirdly, starting in 1934, Drucker spent two years at General Motors with the legendary Alfred P. Sloan, immersed in the workings of the automaker and learning the business from within. This allowed him to talk with authority, but he has always stayed “street smart and wise.” This mentoring helped give Drucker the gift of being able to reason inductively and deductively. He could infer a new principle or a theory from a set of data or being confronted with a particular problem; he could find the right principle to apply to solve it. Drucker’s first article published in HBR, Management Must Manage, challenged managers to learn their profession not in terms of prerogatives but in terms of their responsibilities, to assume the burden of leadership rather than the mantle of privilege. Many in the management/leadership field probably found Drucker to be “deranged,” but in 2024, this is important advice for leader (Stewart 2006). Just a few more of Drucker’s ideas that seemed well outside the mainstream when he proposed them but are standard practice today include: Managing Oneself, Privatization, Decentralization, Knowledge Workers, Management by Objectives, Charismatic Leadership Being Overrated, CEO Outsize Pay Packages, and Enthusiasm of the Work of the Salvation Army (Rees, 2014). Clearly, Drucker remains relevant! References: Kanter, R. 2009. What would Peter say? Harvard Business Review. November, 2009. Meynhardt, T. 2010. The practical wisdom of Peter Drucker: Roots in the Christian tradition. Journal of Management Development Vol. 29. No. 7/8. Rees, M. 2014 The wisdom of Peter Drucker. Wall Street Journal. Dec. 12, 2014. Rowley, J. 2006. Where is the knowledge that we have lost in knowledge? Journal of Documentation. Vol. 62, Iss. 2. 251-270. Stewart, T. 2006. Classic Drucker. Editor Thomas A. Stewart. Harvard Business School Publishing Corporation.
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